Connect Problem 11-12 (algo) A village has six residents, each of whom has accumulated savings of $110. Each villager can use this money either to buy a government bond that pays 20 percent interest per year or to buy a 1-year-old goat, set it onto the commons to graze, and sell it after a year. The price the villager gets for a 2-year-old goat depends on the amount of weight it gains while grazing on the commons, which in turn, depends on the number of goats sent onto the commons, as shown in the following table: Price of 2- Number of goats on the commons year-old goat ($) 125 117 3. 114 4. 111 108 105 a. If each villager decides individually how to invest, then how many goats will be sent onto the commons and how many villagers will buy a bond? Instructions: Enter your responses as whole numbers. 4 goat(s) will be sent onto the commons and 2 O villager(s) will buy government bonds What will be the resulting village income? $ 116 O b. What is the socially optimal number of goats for this village to send onto the commons? yuuyu J I I LU II u What will be the resulting village income? 2$ 116 O b. What is the socially optimal number of goats for this village to send onto the commons? 1 O goat(s) What would village income be if the socially optimal number of goats were sent onto the commons? 110 O c. The village committee votes to auction the right to graze goats on the commons to the highest bidder. Assuming the villagers can both borrow and lend at 20 percent annual interest, how much will the right to graze goats on the commons be worth at auction? 2$ I need help finding the answers to all of the spaces without a green check mark.
Connect Problem 11-12 (algo) A village has six residents, each of whom has accumulated savings of $110. Each villager can use this money either to buy a government bond that pays 20 percent interest per year or to buy a 1-year-old goat, set it onto the commons to graze, and sell it after a year. The price the villager gets for a 2-year-old goat depends on the amount of weight it gains while grazing on the commons, which in turn, depends on the number of goats sent onto the commons, as shown in the following table: Price of 2- Number of goats on the commons year-old goat ($) 125 117 3. 114 4. 111 108 105 a. If each villager decides individually how to invest, then how many goats will be sent onto the commons and how many villagers will buy a bond? Instructions: Enter your responses as whole numbers. 4 goat(s) will be sent onto the commons and 2 O villager(s) will buy government bonds What will be the resulting village income? $ 116 O b. What is the socially optimal number of goats for this village to send onto the commons? yuuyu J I I LU II u What will be the resulting village income? 2$ 116 O b. What is the socially optimal number of goats for this village to send onto the commons? 1 O goat(s) What would village income be if the socially optimal number of goats were sent onto the commons? 110 O c. The village committee votes to auction the right to graze goats on the commons to the highest bidder. Assuming the villagers can both borrow and lend at 20 percent annual interest, how much will the right to graze goats on the commons be worth at auction? 2$ I need help finding the answers to all of the spaces without a green check mark.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:Connect Problem 11-12 (algo)
A village has six residents, each of whom has accumulated savings of $110. Each villager can use this money either to buy a
government bond that pays 20 percent interest per year or to buy a 1-year-old goat, set it onto the commons to graze, and sell it after
a year. The price the villager gets for a 2-year-old goat depends on the amount of weight it gains while grazing on the commons, which
in turn, depends on the number of goats sent onto the commons, as shown in the following table:
Number of
Price of 2-
year-old
goat ($)
goats on the
commons
125
117
3.
114
111
108
6
105
a. If each villager decides individually how to invest, then how many goats will be sent onto the commons and how many villagers will
buy a bond?
Instructions: Enter your responses as whole numbers.
4 O goat(s) will be sent onto the commons and
2 O villager(s) will buy government bonds
What will be the resulting village income?
$
116 O
b. What is the socially optimal number of goats for this village to send onto the commons?
What will be the resulting village income?
$
116 *
b. What is the socially optimal number of goats for this village to send onto the commons?
1 O goat(s)
What would village income be if the socially optimal number of goats were sent onto the commons?
2$
110 *
c. The village committee votes to auction the right to graze goats on the commons to the highest bidder. Assuming the villagers can
both borrow and lend at 20 percent annual interest, how much will the right to graze goats on the commons be worth at auction?
$
I need help finding the answers to all of the
spaces without a green check mark.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education